What is a CSR report? Definition, structure and advantages of sustainability reports

Giving something back to society is the basis of corporate social responsibility. The discipline summarizes activities with which companies are socially committed and make their contribution to helping others. The so-called CSR report provides information about these very activities of a company - in particular, listed companies must bear witness to their measures. We explain everything you need to know.

Definition: What is a CSR report?

CSR is short for corporate social responsibility. In addition to striving for sales and profit, companies are required to increase or at least not reduce the well-being of our fellow human beings and society in the process. Unfortunately, there are many companies around the world that exploit people's labor, endanger their health or destroy the environment in their quest for ever more profits. It is important to create an awareness of CSR and thus ensure the well-being of employees and the environment.

The CSR report is a summary of a company's activities that make a positive contribution to our society. This can be donations to social institutions, reforestation of our forests, reducing waste, using sustainable materials or protecting vulnerable groups in our country. The CSR report is particularly relevant for the stakeholders of a company: customers, partners, suppliers, employees, investors, as well as the press or rating agencies.

The CSR report has a decisive influence on how much trust outsiders place in a company and thus also on its success. Companies that enjoy a high level of trust will find it easier to attract new customers or employees.

In 2017, Germany introduced the CSR Directive Implementation Act, which requires certain companies to report more than before on the non-financial aspects of their financial year. This particularly affects large listed companies with more than 500 employees. The aim of the comparatively new law is to give investors more insight into the business practices of companies, but above all to bring the topic of CSR more into the public eye and to give companies incentives to get involved socially more often or at all.

CSR Report: Structure

Despite increased demands on CSR reporting, there is no obligation for a stand-alone CSR report. CSR topics are often published in the form of a so-called sustainability report. Although the federal government does not impose any mandatory requirements in terms of structure, there are now established standards that companies can use as a guide.

The task of communication here is to educate the reader on the basis of clearly defined key figures and criteria in three areas in particular: Economy, ecology and society. What strategies is the company pursuing in this area, what measures is it taking and what progress is it making? The aim here is to establish the best possible traceability with verifiable and comparable data and facts.

The new CSR reporting guidelines focus in particular on the issues of anti-corruption, compliance with human rights and monitoring the impact on environmental and social concerns of employees along the entire supply chain. In addition to large listed companies, this also affects indirectly producing medium-sized companies as part of the supply chain of large corporations.

Orientation to the uniform standards helps to compare different companies in an industry and to assess their progress or possibly regress. There are different standards for companies of different types that have become established over the years. The "Global Reporting Initiative" (GRI in short), provides the most popular standards in the form of internationally recognized indicators and guidelines, which they themselves call "Sustainability Reporting Guidelines". Companies are encouraged to explain and substantiate the information as precisely as possible.

And: if they do not report on certain aspects, they are asked to explain why this has not been done. This is intended to create further transparency. Most companies also have their GRI report checked and approved by auditors in order to convey greater credibility.

Creating trust with the sustainability report

The biggest plus of the sustainability report is the potential gain in trust among the company's stakeholders - provided it is actually committed to society, of course. Through transparent and comprehensible reporting, readers learn about the company's social activities and thus see what contribution is being made to the common good.

This trust can be the key to winning a reader as a new customer, entering into a new partnership or finding new investors. The press is also interested in your company's CSR activities and will report on them with goodwill, which in turn reinforces the aforementioned aspects. "Do good and talk about it" was the title of an almost 50-year-old PR book - a classic today.

But that is not the only positive effect that good CSR reporting brings. The other major value for companies is seen within the respective organization: By having the various departments deal with the key figures, targets and processes with regard to CSR, this new component is automatically integrated and implemented more and more in the day-to-day work at various decision-making levels. In this way, business processes can gradually be linked to CSR strategies.

Five steps to the CSR report

At first glance, the CSR report seems like a mammoth task. That's why it makes sense to break it down into five steps and work through them one by one. In this way, you will achieve a good result step by step.

• Step 1 - Concept: Create a concept for the content and design of your sustainability report. Which topic do you want to focus on this year and how can you emphasize it visually?

• Step 2 - Define topics: What events and efforts have taken place in your company this year that make a positive contribution to our society? Define the themes of your report.

• Step 3 - Research Content: Now that you know the topics, go into detail. Research the previously determined content, talk to the responsible departments, and identify relevant metrics.

• Step 4 - Write content: Take the information at hand from the research and turn it into easy-to-understand, easy-to-read content. Keep in mind: Your copy should deliver facts and build trust.

• Step 5 - Design: Now set the scene for your content: Not only the words in your sustainability report, but also its appearance will determine how readers perceive your company. High quality and warmth create trust.

Conclusion

The CSR report is an ideal tool for explaining your social commitment and thus gaining the trust of your stakeholders. Not only large, listed companies benefit from the sustainability report. CSR topics are especially relevant for the manufacturing industry with long supply chains. Doing good and talking about it helps every company. The CSR report is your chance to do so.